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Measuring Customer Expectations of Service Quality: Case Airline Industry

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Measuring Customer Expectations of Service Quality: Case Airline Industry Measuring Customer Expectations of Service Quality: case Airline Industry Logistics Master's thesis Ekaterina Tolpa 2012 Department of Information and Service Economy Aalto University School of Economics Measuring Customer Expectations of Service Quality: case Airline Industry Master’s Thesis Ekaterina Tolpa 06.06.2012 Information and Service Management Approved in the Department of Information and Service Economy _____________ and awarded the grade _______________ _____ ____________________________________ _____________ Markku Kuula Markku Tinnilä AALTO UNIVERSITY SCHOOL OF ECONOMICS ABSTRACT Department of Information and Service Economy 06.06.2012 Master’s thesis Ekaterina Tolpa ABSTRACT Objectives of the Study The first theoretical objective of this study is to discuss the concept of service quality and find out the different approaches to measure service quality. The second objective is to define a process model for measuring service quality in air transportation based on literature review. Empirical objectives are to test the process model on selected customer group. Then, the results are used to investigate what services customers consider as the cornerstones of their flight experience, and if there are any differences in service quality preferences between respondent groups (such as male/female travelers, as well as business/leisure travelers). Academic background and methodology This study provides an overview of the services and service quality literature, taking airline industry as a subject for a case study. Airline industry is reviewed as well, and the importance of services, new service development as well as service quality is discussed. The academic literature is used to build up a service process model, which is tested to find out most important service quality attributes for the customers. A survey is chosen as a primary method of data collection. The target group includes young professionals with completed or about to be completed university education. Findings and conclusions The research concluded that the customers value basic services in service process such as information on tickets and flight schedule, communication in case of flight delay as well as no delays in baggage delivery. No significant differences were found between male and female passengers, expect for one case: male respondents evaluated employees’ appearance and attitude as more important compared to female respondents. Finally, from close correlations between some of the attributes, the conclusion can be made that the respondents do not differentiate between in-flight or ground services, and view the air travel experience as a whole. Key words: services, service quality, airline industry, processes Number of pages (including appendices): 95 1 TABLE OF CONTENTS ABSTRACT .......................................................................................................................................... 1 TABLE OF CONTENTS ..................................................................................................................... 2 LIST OF FIGURES .............................................................................................................................. 4 LIST OF TABLES ................................................................................................................................ 5 1. INTRODUCTION ............................................................................................................ 6 1.1. Research Objectives and Methodology ........................................................................... 7 1.2. Limitations ......................................................................................................................... 8 1.3. Research Structure ............................................................................................................ 9 2. CASE AIRLINE INDUSTRY ....................................................................................... 10 2.1. Industry Profile ................................................................................................................ 10 2.1.1. Airline classification ....................................................................................................... 11 2.1.2. Strategic alliances ........................................................................................................... 14 2.2. Customer Segmentation .................................................................................................. 16 2.2.1. Business vs. leisure customers ....................................................................................... 16 2.2.2. Male vs. female customers ............................................................................................. 19 2.3. Service Development and Innovation in Airline Industry ............................................ 20 3. SERVICES AND SERVICE QUALITY ...................................................................... 22 3.1. Defining Services ............................................................................................................ 22 3.2. Discussing and Measuring Service Quality ................................................................... 25 3.3. Managing Customer Satisfaction and Expectations ..................................................... 29 2 3.4. Service Quality in Airline Industry ................................................................................ 32 3.4.1. Service Process in Airline Industry................................................................................ 35 3.4.2. Service Process Attributes .............................................................................................. 38 4. RESEARCH METHOD ................................................................................................. 45 4.1. Data Collection ................................................................................................................ 45 4.2. Target Group ................................................................................................................... 45 4.3. Survey Scales .................................................................................................................. 46 5. RESEARCH RESULTS ................................................................................................. 48 5.1. Respondents Profiling ..................................................................................................... 49 5.2. Analysis and Discussion ................................................................................................. 52 5.3. Service Process Revised ................................................................................................. 61 6. CONCLUSION ............................................................................................................... 63 6.1. Theoretical Contribution................................................................................................. 64 6.2. Practical Contribution ..................................................................................................... 65 6.3. Managerial Recommendations ....................................................................................... 66 6.4. Limitations and Further Research .................................................................................. 67 REFERENCES ................................................................................................................................... 69 Appendix 1 Survey ............................................................................................................................. 77 Appendix 2 Survey Data .................................................................................................................... 81 Appendix 3 Data Analysis ................................................................................................................. 89 3 LIST OF FIGURES Figure 1 Determinants of perceived service quality (Parasumaran et al., 1985) ............................ 26 Figure 2 Perceived service quality model (Gronroos, 1982) ........................................................... 27 Figure 3 Systems approach to service quality (Johnson et al., 1995).............................................. 28 Figure 4 Service process model ......................................................................................................... 35 Figure 5 Airline passenger lifecycle (Kelley, 2012)......................................................................... 36 Figure 6 Service process .................................................................................................................... 37 Figure 7 Service process attributes .................................................................................................... 44 Figure 8 Respondents profiling: age groups ..................................................................................... 49 Figure 9 Respondents profiling: main reason to fly ......................................................................... 50 Figure 10 Respondents profiling: travel frequency .......................................................................... 51 Figure 11 Respondents profiling: tickets purchase ........................................................................... 52 Figure 12 Results on service process step level ...............................................................................
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